Jacob Christensen

The research suggests that ex post empirical (partial) estimates of free trade agreements in general, as well as European economic integration agreements specifically, have been considerably underestimated, and appear many times larger than the effects predicted by ex ante CGE models and traditional empirical analyses. The main source of the underestimation of empirical estimates appears to be related to researchers ignoring that national governments self-select into such agreements (which creates an endogeneity bias).